Key Takeaways. Chapter 11 bankruptcy is a business reorganization plan, often used by large businesses to help them stay active while repaying creditors. ... Chapter 13 bankruptcy eliminates qualified debt through a repayment plan over a three- or five-year period .
What is the difference in Chapter 11 and Chapter 13?
Chapter 11 can be done by almost any individual or business, with no specific debt-level limits and no required income. Chapter 13 is reserved for individuals with stable incomes , while also having specific debt limits.
Which is better Chapter 7 or Chapter 13?
For many debtors, Chapter 7 bankruptcy is a better option than Chapter 13 bankruptcy. ... For instance, Chapter 7 is quicker, many filers can keep all or most of their property, and filers don't pay creditors through a three- to five-year Chapter 13 repayment plan.
What is the difference between Chapter 7 and Chapter 13?
With Chapter 7, those types of debts are wiped out with your filing's court approval , which can take a few months. Under Chapter 13, you need to continue making payments on those balances throughout your court-instructed repayment plan; afterwards, the unsecured debts may be discharged.
What do you lose when you file Chapter 7?
Filing Chapter 7 bankruptcy wipes out most types of debt , including credit card debt, medical bills, and personal loans. Your obligation to pay these types of unsecured debt is eliminated when the bankruptcy court grants you a bankruptcy discharge.
What is the income limit for Chapter 7?
If your annual income, as calculated on line 12b, is less than $84,952 , you may qualify to file Chapter 7 bankruptcy. If it's greater than $84,952, you'll have to continue to Form 122A-2, which we'll review in the next section. It should be noted that every state has different median income calculations.
Does Chapter 11 wipe out debt?
An individual filing for Chapter 11 won't get the discharge until you have made all payments under the plan. Also, an individual cannot wipe out some types of debt , such as domestic support obligations, some taxes, and liabilities incurred through fraud. Learn more about how Chapter 11 bankruptcy works.
Who gets paid first in Chapter 11?
Secured creditors , like banks, typically get paid first in a Chapter 11 bankruptcy, followed by unsecured creditors, like bondholders and suppliers of goods and services. Stockholders are typically last in line to get paid. Not all creditors get repaid in full under a Chapter 11 bankruptcy.
What is the average Chapter 13 payment?
The Overall Chapter 13 Average Payment. The average payment for a Chapter 13 case overall is probably about $500 to $600 per month . ... It takes into account a large number of low payment amounts where low income debtors are paying very little back. Then it averages out the larger payments of $1000 to $2000 or more.
Can I keep my car in Chapter 7?
If you file for Chapter 7 bankruptcy and local bankruptcy laws allow you to exempt all of the equity you have in your car, you can keep the vehicle— as long as you're current on your loan payments . ... They may also give you the option to pay off the equity at a discount in order to keep the car.
Will my employer know if I file Chapter 7?
Will My Employer Find Out About My Bankruptcy? You are not required by law to inform your employer if you file for Chapter 7 or Chapter 13 bankruptcy. ... It most commonly happens if your wages were previously being garnished and your employer has to be notified to stop the wage garnishment because the debt was discharged.
Will I lose my car and house in Chapter 7?
Chapter 7 bankruptcy allows you to keep your home if 1) you are current with your mortgage payments when you file for bankruptcy, and 2) your state laws approve of the bankruptcy exemption. ... Regarding your automobile, most chapter 7 cases allow you to keep the vehicle if you are current with payments .
Do they take your taxes when you file Chapter 7?
A tax refund is an asset in both Chapter 7 and Chapter 13 bankruptcy. It doesn't matter whether you've already received the return or expect to receive it later in the year. ... As with all assets, when you file for bankruptcy, you can keep your return if you can protect it with a bankruptcy exemption.
What is the maximum income to qualify for Chapter 13?
Chapter 13 Eligibility
Any individual, even if self-employed or operating an unincorporated business, is eligible for chapter 13 relief as long as the individual's unsecured debts are less than $394,725 and secured debts are less than $1,184,200 .
How much does a lawyer charge for Chapter 7?
In general, attorney fees for a Chapter 7 bankruptcy range from $1,000 to $3,500 depending on the complexity of the case. Larger firms with more advertising and overhead costs sometimes charge more than a solo practitioner, but not always. Some larger operations offer low fees and count on a higher volume of cases.
Can you file Chapter 7 if you make a lot of money?
When you receive a discharge of your debts under Chapter 7, you no longer have to repay your debts. ... If you do not, you can still qualify for Chapter 7 bankruptcy even if your income is very high. High-income Chapter 7 bankruptcy filers have to prove that they are filing their petitions in good faith.
